Across The Country, Renters Are Getting Crushed By Housing Costs

In the grand scheme of personal finances, your take home pay is
like an apple pie. Your bills are the hungry flock of kids
banging their fists on the table to get their share.

For renters in
America, housing is usually the hungriest of the bunch. Ideally,
it would gobble up one-third of the pie –– anymore than that, and
you likely wouldn't have enough to feed the rest.

Unfortunately, one in four working renters watched housing devour
more than half of their paycheck pie in 2011, according to the
latest Housing Landscape Reportfrom
the Center for Housing Policy.
The report analyzed the period between 2008 and 2011, when the
rate of renters putting more than half their income toward
housing jumped nearly 4%.

“The growing
rate of severe housing cost burdens among renters is not a new
trend, but it is clearly an unsustainable one,” said
lead
report author Janet Viveiros. “While rental costs have
steadily risen over the last few years, wages for these working
families have not fully recovered from the hit they took between
2008 and 2009. Spending most of your paycheck on rent means
cutting back on other necessities, including health care and even
food.”

Among working
households earning less than 30 percent of their area's
median income (AMI), a whopping 80% spent more than half their
pay on housing alone. Among the toughest states for renters are
usual suspects like New York, California, Florida, Nevada, and
Arizona (see map above).

Much of the strain on renters has to do with fallout from the
housing crisis of 2009. Homeowners fled their underwater homes
and flooded rental markets to downsize, driving up demand on a
stagnant supply of properties and sending rental prices
skyrocketing. At the same time, the job market floundered and
people's take home pays dwindled –– basically a perfect storm in
personal finance hell.

Homeowners who
stuck out the crisis haven't fared much better, but their cost
burden remained relatively stable throughout the economic
recovery, according to CHP. One in five working
homeowners experienced severe housing affordability challenges,
versus one in four working renters. However, their income dropped
4% between 2008 and 2011.